November 18, 2009
Week in Review: A Carbon Price Won’t Win America Any Clean Tech Awards
This week, U.S. clean tech news is almost as dramatic as the buzz surrounding the 2010 Academy Awards. And while the outcome of intensifying competition has more serious implications in the clean tech sector, like any motion picture worthy of a nomination, there's a very distinct underlying theme to the clean tech drama unfolding: the U.S. needs a national strategy for clean tech competitiveness.
As Joan Fitzgerald suggested in a lengthy American Prospect piece in December, "America's failure to have a coherent, national industrial policy," has dire consequences for long-term economic competitiveness.
That's part of the reason the Department of Energy (DOE) held its inaugural ARPA-E Innovation Summit in Washington D.C. earlier this week, which amassed about 1,700 scientists, engineers, policymakers, investors, and entrepreneurs to discuss the details of a national competitiveness strategy.
But according to Greentech Media's David J. Leeds, who reported his observations of the event, even amidst the technology presentations and keynote speeches by eminent experts including Secretary of Energy Steven Chu, Google's Dan Reicher, and Kleiner-Perkins' John Doerr, it was abundantly clear that funding for ARPA-E ($400 million in 2009-2010; $300 million in 2011 request) and clean energy R&D (about $5 billion for all energy technologies), in general, is "criminally low."
"While the name of the program is clearly on target, and based on the original name of DARPA (the DoD's advanced research agency that brought us advancements that include GPS, stealth bombers and the internet), what is plainly missing is the military-scale funding to go along with it."
Just for comparison, DARPA's budget alone is $3 billion and defense-related R&D is pumped with about $80 billion annually.
Glaring discrepancies in government spending on clean energy relative to DARPA and particularly with respect to foreign clean tech competitors didn't give John Doerr, with support from NYT columnist Thomas Friedman and GE CEO Jeff Immelt, a moment's pause as he chanted "put a price on carbon" as the top three things the U.S. needs to do to win the clean energy race. According to Leeds, Friedman even had the audacity to threaten all the conference attendees with being categorized as "hobbyist[s]" if a carbon price wasn't implemented.
Ironically, EDF chimed in with the refrain in a piece on their blog while simultaneously citing our report, "Rising Tigers, Sleeping Giant," which clearly articulates a U.S. competitiveness strategy built around direct public investment, with carbon pricing playing a limited complementary role, not the lead.
And other organizations, such as the Center for American Progress (CAP) and the Apollo Alliance, that have recently taken a closer look at what's really necessary to compete in the clean energy race also suggest that a carbon price is really only one of many policy levers.
Of course, a carbon price isn't everyone's response to the growing challenge America faces as nations like China, Japan, Germany, and Spain move aggressively to dominate the clean tech industry. For four Democratic Senators, this week, the reaction to a cash grant stimulus program that was sending more money to foreign clean tech companies than to the domestic ones it was intended to stimulate was "Buy American."
But as Breakthrough's Jesse Jenkins and Devon Swezey point out today in their discussion of the new legislation, protectionism, like carbon pricing, continues to ignore the pesky little problem that no amount of analysis from Breakthrough, CAP, the Apollo Alliance, or Joan Fitzgerald can overstate: we need a comprehensive clean energy competitiveness strategy, anything else is for "hobbyist[s]."